• by David Downey , February 26, 2007

A Vietnam-era bumper sticker said, "Kill 'em all, then let God sort 'em out." While in questionable taste, that's similar to how television advertising has been working: "Reach 'em all, then let each consumer figure out if the ad was intended for him."

Since its inception, television advertising has been the marketer's blunt instrument, a crushing sledgehammer producing great impact. But it's a tactic that works only if two conditions are met:
(1) Television reaches the audience cheaply enough, and
(2) No better alternatives exist.

But the world has changed, and neither condition is true any longer. Television isn't anywhere near as inexpensive as it once was -- CPMs have soared, rising 97% over the past decade, and rapidly losing their relative advantage to print, radio, and other media. And television's competitive environment has also changed dramatically, as the Web now has the ability to speak only to those who have asked to be spoken to.

Left to its own, television advertising is in a death spiral. This isn't a new revelation; Paul Klein, programming chief at NBC in the mid-'70s and co-founder of HBO, saw a future that looks a lot like our present. He saw a fragmented television world where slivered audiences forced broadcasters to air cheaper programming, which wasn't as appealing to audiences. He saw broadcasters forced to charge higher prices to reach smaller audiences, pushing CPMs higher, and making television a relatively less desirable medium for marketers to advertise on.

And naturally, as bright as he was, Paul Klein in the 1970s couldn't foresee how the Web, with its pinpoint targetability and accountability, would rapidly become a marketer's dream -- and siphon billions out of the television advertising marketplace.

So why should marketers continue using television?

And how will they best go about using it?

Television remains the marketer's most powerful medium. Nothing else combines sight, sound and motion in the home, nothing else communicates as well. So if the creative impact is there -- and it is -- then (to paraphrase General George Patton, in another context), "A medium so eloquent deserves to be saved."

The challenge for television advertisers is to reach the target, and only the target. This means that television advertising will look a great deal like direct mail: spots will be targeted to consumers by age, gender, location, ethnicity, income, and any other demographic or psychographic overlay. That targeting will greatly diminish wasted audience delivery. Imagine how much less a spot will cost an advertiser if it only reaches his target audience. And imagine also how much more attractive it will make television to advertisers who haven't used it because they considered their target audiences "too small." Using this type of television advertising -- truly addressable television advertising -- makes it more efficient for P&G and more practical for Rolls-Royce.

Addressability will mark the rebirth of television advertising. It will continue to take advantage of the impact of television while incorporating the targetability of the Web. It is today's magic, and tomorrow's reality.

But, as they say in the direct response commercials, there's more. Take a truly broad-reach television program like "American Idol" or "CSI". Each reaches huge numbers -- boxcar numbers. And advertisers use these shows knowing that a spot intended to reach, say, women 25-54 is also reaching large numbers of men 25-54 as well as adults 55+. But imagine if each spot is "optimized" to reach only its designated target audience so that, in any given break, separate spots run, each ending up in front of only those "eyeballs" for whom it was intended. How much more efficient, relevant and engaging will that make television?

Finally, think about the "long tail" of cable television. The top 20 networks (ESPN, Disney, USA, TNT, TBS, Lifetime, etc.) account for about 80% of the cable audience, with the remaining 20% sliced up among E!, the Food Network, Animal Planet, and so on. Under current economic realities, these smaller networks, taken separately are hardly worth advertising on. But once they are aggregated, imagine advertisers reaching their audiences cumulatively instead of separately. Then these smaller networks truly become a force to be reckoned with in television advertising.

If all this sounds like science fiction, it's not. The technology necessary to achieve these results exists today, and is in the process of being deployed. The three components --- addressability, spot optimization, and audience aggregation -- are certain to have a strong positive impact on marketers' use of television, and will have a similarly positive impact on television's ability to compete with the Web.